A lawsuit
initiated by former City Attorney Rocky Delgadillo to prevent an audit of his
office’s Workers’ Compensation Division by former Controller Laura Chick was
rendered moot by the actions of the successor city attorney and controller
after they took office in July 2009, the Court of Appeal for this district has
ruled.

Div. Eight, in
an unpublished decision Monday, noted that current City Attorney Carmen
Trutanich invited current Controller Wendy Greuel to conduct a performance
review of the workers’ compensation program, which has not been completed, even
though Los Angeles Superior Court Judge Mark V. Mooney had found the
controller could not audit the office of an elected city official.

The case was
tried before Mooney on June 1, 2009, and he issued his statement of decision June
22. After considering lengthy objections by the controller, Mooney issued his
statement of decision in Dec. 2009, and entered judgment in favor of the city
on Jan. 7, 2010.

On Oct. 12,
2010, the controller released an audit report of the workers’ compensation
program, and Trutanich’s office issued a press release the following day which
said the city attorney, immediately after taking office, had asked Greuel to
initiate “a complete and thorough performance audit of the City Attorney’s
Workers’ Compensation Division as it has operated since before July 2009.”

‘Considerable Time’

The release
stated that “[t]he City Attorney’s Office personnel assigned to the Workers’
Compensation Division took considerable time over the past 12 months [i.e.,
October 2009 to October 2010] to discuss the program and provide detailed
information to the audit team.”

In her decision
for the appellate panel, which took judicial notice of these documents, Justice
Elizabeth A. Grimes reasoned the “case was rendered moot before entry of
judgment in the trial court.”

The documents,
she said, indicate that “the performance audit that gave rise to the appeal was
well underway with the full cooperation of the City Attorney three months
before the court entered judgment in its January 2010 ruling, and it was
completed by October 2010.”

Although the
audit report was not released until 10 months after entry of judgment, Grimes
said “it was plain by at least October 2009 that City Attorney Trutanich
supported the Controller’s audit and was fully cooperating with the auditors.”

Unnecessary Judgment

Grimes concluded
the “judgment was unnecessarily rendered below because the parties failed to
ask the trial court to dismiss the case as moot” and, joined by Presiding
Justice Tricia A. Bigelow and Justice Laurence D. Rubin, directed Mooney to
dismiss the underlying case.

She cautioned
that this order “does not imply the judgment was erroneous on the merits, as we
have not considered the merits,” however, as reversal is “merely the necessary
procedural step to properly dispose of this moot case.”

Trutanich, in a
statement yesterday, defended his decision not to seek dismissal of the
suit—for which he was criticized by Chick, who called him a “demagogue” and
“liar” in a 2009 radio interview—since he “refused…to have the taxpayers pay
the $200,000 bill for the Controller’s private attorney, who lost the lawsuit.”

He remarked that
he had “said from Day One, the Controller was invited in and free to conduct a
thorough and honest audit of my Office,” and further asserted that he had
“fully cooperated and have implemented more than 90% of the recommendations
made in that audit,” contrary to a “score card” issued by Greuel last month.

The six-page
report, available on the city controller’s website, tracks the progress of city
departments in implementing the recommendations made in the 41 audits her
office has completed in the last two years. It indicates that Trutanich’s
office has failed to satisfy any of the 66 recommendations Greuel had made, or
begin working towards their implementation.

A spokesperson
for Trutanich’s office yesterday disputed this report, asserting the City
Attorney’s Workers’ Compensation Division has implemented, or is in the process
of implementing, 50 of the recommendations. These include “the drafting of a
comprehensive Support Staff Manual, implementing a peer review process,
preparing detailed case closure reports, increasing staffing and reducing
caseload per attorney and training City Personnel Department adjustors and
supervisors,” he said.

Full
implementation, however, the spokesperson said is “not possible at this time
due to severe budget cuts suffered by the City Attorney’s Office in recent
fiscal years.”

He claimed
Trutanich’s office “has also worked directly with the City Council and
implemented several significant cost-saving measures that were not part of the
Controller’s recommendations, including 1) increasing the settlement cap from
$50,000 to a maximum of 99% of permanent disability (PD) without reference to
dollar limit, provided such settlement represents undisputed statutory
benefits; and 2) the e-filing of court documents.”

Greuel’s audit
indicated that the city attorney’s program was mismanaged, and that the
office’s failure to collect from third parties responsible for employee
injuries may have cost the city more than $3 million each year. She also said
the office took too long to settle cases and diverted attorneys to other
projects, weakening its ability to effectively represent the city in workers’
compensation cases.

Yesterday Greuel
issued a statement asserting that she “believe[s] in transparency and the right
to audit all city programs, departments and offices,” and noting that she has
“uncovered more than $100 million in waste fraud and abuse” during her tenure
as controller.

When she took
office in 2009, she said she “immediately asked the City Attorney to dismiss
the case because I believed I had the right to audit any city program, no
matter where it was housed, and this case was a waste of money and time and
should not go forward.”

Monday’s
decision “confirmed my initial position that the lawsuit should have been
dismissed before the trial court entered its final judgment by reversing the
trial court’s judgment as moot,” and “allows the Controller’s office to
continue to root out waste fraud and abuse in connection with any program in
the City of Los Angeles,” Greuel said.

Greuel is a
candidate in the 2013 mayoral race......, while Trutanich is running what he is
calling an exploratory effort to become district attorney next year.